Pet Health Insurance Plans Grow By Leaps And Bounds

When Fido or Fluffy get sick, their owners suffer as well. And it's not just empathy for a furry friend not feeling well -- it can be a major pain in the pocketbook.

Veterinary medicine advances make it possible to perform sophisticated and costly medical procedures on pets, such as hip replacements, cataract surgery and chemotherapy.

Even when the family pet isn't feeling bad, "routine maintenance" on a pet can get pricey, with annual vaccines, heartworm tests, dental care and periodic testing for parasites.

With 58.2 million U.S. households owning cats or dogs, and 91 percent of them taking their animals to the vet regularly, according to the American Animal Hospital Association, the question is how to handle the bills, which can run into thousands of dollars.

More and more, the answer is pet insurance. In a nation that spends $20 billion a year on its companion animals, according to AAHA statistics, it seems as inevitable as doggie day care and pet resorts.

The options are multiplying too. Pet owners can choose among traditional insurance policies, which have been around for 20 years, and pet HMOs and discount networks that have begun appearing in the last three years.

Bad economic sense

At least one major consumer advocacy organization advises against pet health insurance. Robert Hunter, director of insurance for the Washington, D.C.-based Consumer Federation of America, one of the nation's largest consumer advocacy groups, expressed his group's view, which is likely to outrage animal lovers who think of their dogs and cats as their "furkids." Hunter suggested euthanasia as a better solution than costly medical care for seriously ill pets.

He said third-party payment plans in the pet health arena make bad economic sense: "Why pay $7,000 for medical care for a $50 dog when the world is full of puppies who need a home?"

"We are opposed to third-party payments in pet health care," Hunter said. "We don't think people should buy it, but that doesn't mean it shouldn't be available. For some people, it's important because they become so incredibly attached to their pets. But it's not a good value, and the vast majority don't need it and are better off paying fees as they come due."

Humane groups are more enthusiastic. The American Society for the Prevention of Cruelty to Animals, based in New York City, gives its seal of approval to several health care insurance carriers. And the Humane Society of the United States recently worked with underwriters to provide pet insurance for its members.

While a number of newer HMO-type products are on the market, it is the more traditional insurance policy -- the kind so many humans can no longer get through their group plans -- that seems most popular, especially with veterinarians.

"We got many requests from our members asking us to come up with a quality pet health insurance," said John Snyder, director of programs for companion animals for the HSUS, based in Washington, D.C. "We think our members are aware of the needs of pets, and see this as a wise investment."

The biggest knock against pet health insurance has always been that it is full of deductibles, exclusions for pre-existing conditions and higher premiums for older animals.

Robin Itzler, direction of communications for Veterinary Pet Insurance, begun in 1980 in Anaheim, Calif., said it is logical to have some exclusions and higher, age-related premiums. If you bring in a 12-year-old dog with a hip condition, it is not going to cost the same as it would for a healthy puppy.

"You have to consider all the factors. We may not cover one thing, but we will cover other problems your animal is likely to have," she said. "The best way to approach pet insurance is get it early for a puppy or kitten, when it is cheap, and renew it every year. That way, when your pet is 8-11 [years old] and something happens, it is covered with no problems, there is nothing to pre-exist." VPI writes about 125,000 policies.

These kinds of insurance plans typically pay 80 percent of covered expenses, such as surgery, emergency and hospital care, X-rays, lab tests and chemotherapy, with annual limits. Premiums vary based on age, type of animal and the state in which you live.

"We are seeing more and more of our customers getting insurance, and most are happy they got it," said Dr. Mickey Axelband, a Boynton Beach veterinarian at Coral Breeze Animal Hospital.

"We like it because insurance allows us to take better care of pets," Axelbrand said. "When you get to big-money items like surgery, it sometimes becomes a case of owners deciding whether to spend the money or put the pet to sleep. With insurance, money is not such a big issue, and the health of the animal becomes the primary objective."

Several years ago, Axelbrand said, he wouldn't have recommended insurance because policies didn't pay as well or have good coverage. But he said it has improved.

Some vets, however, still seem leery of the newer "managed care" type pet insurance products.